California issues cease and desist letter to Bitcoin Foundation

The bitcoin community was reeling over the weekend, after it was revealed that California’s state financial regulator had issued a cease and desist order against the Bitcoin Foundation. The cease and desist order was dated May 30, one and a half weeks after the Bitcoin 2013 conference in San Jose. The letter said that the Bitcoin Foundation may be a money transmission business (MTB), and threatened it with fines and jail time. Jon Matonis, who is a board member at the Foundation, revealed the letter in his Forbes column over the weekend. The letter threatens the Foundation with penalties of $1000 for each violation of Financial Code 2030, or $1000 per day under Financial Code 2151. Anyone violating Financial Code 2152 could also incur jail time, it said, before throwing a slew of other regulations at the Foundation. The letter, signed by Paul Clayton, senior counsel at the...